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What is Peak Oil?
Colin Campbell: "The term Peak Oil refers to the maximum rate of
the production of oil in any area under consideration, recognizing
that it is a finite natural resource, subject to depletion."
Peak Oil theory is that any finite resource, (like
oil), will have a start, middle, and an end of production, and at some
point it will reach a level of maximum output.
Oil production typically follows a bell shaped curve when using a
graph, with the peak of production occurring when approximately half
of the oil has been removed. This holds true with some exceptions, for
a single well, a whole field, an entire region, and probably the
world. The underlying reasons and causes are many but suffice to say
that oil becomes more difficult and expensive to extract as a field
ages past the mid-point of its life.
In the US for example, oil production grew steadily until 1970 but
declined thereafter, regardless of market price or improved
strategies.
In 1956 M. King Hubbert, a Shell Oil geologist, predicted the peaking
of US Oil production for the late 60's.
Although most in the industry disagreed he was correct. He was the
first to say that oil discovery, and production, would follow a bell
shaped curve over its life. With his success in forecasting the U.S.
peak, his analysis became known as Hubbert's Peak.
The amount of oil discovered in the U.S. has steadily dropped since
the late 30s.
40 years later, U.S. oil production peaked, and has fallen ever since.
World discovery of oil peaked in the 60s, and declined since then. If
the 40 year cycle seen in the U.S. stays true for world oil
production, that puts global peak oil production, very close; after
which oil would become less available, and hence more expensive.
Today we consume around four times as much oil as is discovered.
When Hubbert's Peak is applied to world oil production it estimates
that approximately half of all oil that will be recovered, has been
recovered, and oil production may reach a peak in the very near
future, or perhaps already has! |
